BHARAT LINE LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) BY this reference under S. 66(1) of the Indian INCOME TAX ACT, 1922, the question that is referred to us for determination is :

(2.) THE question for determination relates to the asst. year 1957 -58, the previous year of which was the calendar year ending December 31, 1956.

(3.) IN or about October, 1955, the assessee commenced negotiations for sale of the above steamer through its agents in London, M\s. Harley Mullion & Co., Ltd., London. These negotiations resulted into acceptance of offer on December 2, 1955, by the agent of the buyer, a company floated in Panama. The acceptance of the buyer was communicated to the assessee by a cable and letter dated December 2, 1955, by the assessee's agents, M/s Harley Mullion & Co., Ltd., London. Thereafter other formalities regarding Government permission, mode of remittance of sale proceeds from purchaser with the approval of the Reserve Bank of India, etc., were carried out. On December 28, 1955, the ship sale contract was reduced to writing in accordance with the terms agreed during the course of negotiations. The contract, inter alia, provides that the vessel is sold on outright basis and is to be delivered to the purchaser safely afloat with her present class maintained free of all recommendations and free of average at an Indian port in vendors' option.